Discussing commercial/multifamily delinquencies, skepticism about Fed rate hikes climbs, the real unemployment number, White House to push for infrastructure projects, mortgage originations fall and much more…
Delinquency rates for commercial and multifamily mortgage loans were flat or decreased in the first quarter of 2017, according to the Mortgage Bankers Association’s (MBA) Commercial/Multifamily Delinquency Report.
Jamie Woodwell, MBA’s Vice President of Commercial Real Estate Research said:
Delinquency rates for commercial and multifamily mortgages remained at or near record lows for most capital sources during the first quarter. Growth in property incomes and property values, coupled with low interest rates, have facilitated financing. As we near the end of the second quarter, the industry has largely worked through the so-called ‘wave of maturities’.
Very good news. The last thing we need to do is repeat the past but from the commercial/multifamily angle this time.
While Janet Yellen and her Federal Reserve colleagues are poised to raise interest rates at their meeting this month, investors increasingly doubt the central bank’s projection for additional hikes following soft reports on U.S. employment and inflation.
Goldman Sachs Group Inc. on Friday pushed back its forecast for a third rate increase this year to December from September. Trading in futures contracts shows odds of a September increase have dropped to just one in four, and investors are now pricing in less than one rate hike in 2018 for the first time since the eve of the U.S. elections in November.
Fed officials speaking on Friday expressed no disappointment with the payrolls gain of 138,000 last month, which was below economists’ expectations. Philadelphia Fed President Patrick Harker called it a “good number,” while Dallas Fed President Robert Kaplan said “if we are not at full employment, we are moving closer.”
While Fed officials may not have expressed any disappointment with the low payrolls number, let me point out that this isn’t enough to keep up with population growth…
Well, the truth is that the official “unemployment rate” that the mainstream media endlessly hypes is so manipulated that it has essentially lost all meaning at this point.
In May, we were told that the U.S. economy added 138,000 jobs, but that is not even enough to keep up with population growth.
However, when you look deeper into the numbers some major red flags quickly emerge. You won’t hear it on the news, but in May the U.S. economy actually lost 367,000 full-time jobs. That is an absolutely nightmarish figure, and it confirms the fact that economic activity is starting to dramatically slow down.
It makes you wonder how the Fed can raise their benchmark rate if they are actually concerned about “full employment”.
The White House will kick its major infrastructure initiative into high gear next week with a string of high-profile events aimed at ramping up support for one of President Trump’s chief campaign promises.
The administration had been under increasing pressure to show progress on the $1 trillion rebuilding package, which Trump broadly outlined in his budget proposal last week.
While work on the infrastructure proposal has been underway for months, next week will mark the administration’s most public effort yet to sell stakeholders, lawmakers and the public on Trump’s plan.
Even if you are not a Trump fan, you probably want our aging infrastructure worked on. It will create jobs and help to maintain our quality of life.
The only thing I would suggest is that only American companies using 100% American employees and 100% American equipment and supplies be used.
America’s biggest as of 2016 generation, the Millennials, has a heavy burden on its collective 150 million shoulders: its task is to not only step in as a buyer of stocks once the baby boomers begin selling in bulk, but to also provide the much needed support pillar for the recovery of the US housing market. In fact, there have been countless “bullish” housing market theories built upon the premise that sooner or later tens of millions of young American adults will emerge from their parents’ basements, start a household, and buy a house.
So far that theory has not been validated. One simple reason is that Millennials simply can’t afford to buy a house. As we reported last week, a study from Apartment List showed that nearly 70% of young American adults, those aged 18 to 34 years old, said they have saved less than $1,000 for a down payment. This is similar to what a recent GoBanking Survey found last year, according to which 72% of “young millennials”- those between 18 and 24 years old – had $1,000 in their savings accounts and 31% have $0; a sliver (8%) have over $10,000 saved. Of the “older millennials”, those between 25 and 34, 67% had less than $1,000 in their savings accounts, 33% have nothing at all, and 15% had over $10,000.
So does that mean that Millennials can simply be written off as a potential generation of homeowners, and if so, what are the implications for the broader housing market?
While it does not look good, the key thing is how does it look for each individual? It is quite possible that many potential buyers are discouraged when they shouldn’t be. Maybe buyers should ask themselves what they would give up to make owning a home a reality…
You have to work hard to achieve some goals. Nothing good comes easy or without effort…
Q1 2017 Mortgage Originations Fall 34 Percent, Led By 45 Percent Drop in Refinance Lending
Serious ouch from Black Knight’s April 2017 Mortgage Monitor. Some of the highlights:
- First mortgages were down 9.0% from Q1 2016 and at the lowest point since Q4 2014
- Refinance lending was down 45% from Q4 2016 and 20% from the same time last year
- Purchase originations fell 21% on a quarterly basis but up 3.0% from Q1 2016
- Home prices saw the largest monthly rise in nearly four years in March
- The Black Knight Home Price Index is 1.5% above the prior peak observed in 2006
Not good to see this severe drop in mortgage originations. I know most of this is due to the decrease in refi’s but how much is due to the low inventory issue?
That’s all I have time for today. I plan on posting the latest Weekly Market Report tonight so check back tomorrow for the latest info on real estate market conditions in the Anderson SC area!